Disney has shut down its Disney Movies Online service that streamed movies for purchase and rental, reports Deadline. The service allowed users to rent or purchase movies on its site and watch those via streaming. The site’s source says that the service didn’t generate the number of users it was supposed to and cost a bundle to run.

Part of the service’s feature set was the ability to offer you digital streaming for movies that were purchased on DVD or Blu-Ray. You would enter a code and have the streaming copy added to your library. Disney is in the process of developing a replacement service called Disney Movies Anywhere, which could allow for downloading and other things that were restricted by the DMO service.

“The digital environment is rapidly evolving and Disney Movies Online does not have the flexibility that many users today demand. We made a business decision to close the service until we are able to provide the greatest value and experience to our customers,” said a Disney rep.

Here’s Disney’s statement:

Disney Movies Online is closing on December 31st. As part of this change, purchases, upgrades, and Magic Code entries can no longer be made on the Disney Movies Online website. You can continue to stream your existing movies until December 31st.

You can still enter Magic Codes on DisneyMovieRewards.com, and Disney Movies Rewards services will not be interrupted. You can also continue to use your Disney member name and password to access and enjoy other Disney websites. In addition, if you purchased a Disney Combo pack with Digital Copy, your Digital Copy can still be transferred and watched from either iTunes or Windows Media Player.

I actually used the DMO service to store our household’s many, many Disney movies in digital form for streaming. Unfortunately, I never once used it to actually stream a movie. Nor did I purchase or rent any movies, preferring to do so via iTunes, especially as many movies offered similar codes for downloads via Apple’s service. It was too clunky, and too slow. And there were terrible options for streaming via tablets like the iPad.